Buying a home is not an easy feat. However, if you are systematic about it and you follow a process, then the time and effort you need to spend on it may just be cut in half. What’s important is that you are able to understand not just how to find but also finance the house that is perfect for your needs.

Below are several steps you can follow that will make the process of home buying more or less manageable for you. What’s also great about these steps is they will be able to help you make informed decisions.

Step 1. Do Your Research

You should start doing this the moment you decide to buy a home. Look into websites, magazines, and newspapers that contain real estate listings. Take note of the homes you like as well as the changes in their asking prices and the length of their stay in the market. This will not just give you an idea of the housing trends, but also how much you can afford.

 

 

Once you have idea of the kind of house you want, you will be able to see if your income is steady enough to finance the mortgage. You will also be able to know how much you need to save or spend on the down payment. Generally, homes priced between $1 million and $500,000 will need you to pay up 5% of the initial price and then 10% of the rest. Homes that cost at least a million or more will need a minimum down payment of 20%.

Remember that lenders usually recommend that you find a home that will cost no more than five times your yearly household income. However, you would still need to look into your finances to assess this situation.

Step 2. Get your prequalification and preapproval requirements in order.

To further assess how much you can actually spend on your new home, you need to have yourself prequalified for a mortgage. To do this, you just have to provide your chosen mortgage banker with such financial information as your income, savings and investments. Your lender will review all these and will let you know how much they will be able to lend you. From this, you will already be able to know the price range of the houses you should be considering.

Later on, you can get a credit preapproval which will need for you to send in more of your financial documents like bank account statements, W-2 statements, and paycheck stubs, among others. This is so your lender can validate your financial status as well as your credit rating.

Step 3. Find yourself the best real estate agent.

You will need to find the right real estate agent to partner with in buying a home. Your agent will be able to provide you with information about the right homes that may not be available to the public. Their acquired knowledge in buying homes and negotiating with sellers will prove to be valuable for you. Plus, if you will find an agent who is in the lookout for your best interests, then you can be sure that you will find a home that is ideal for your needs and your budget.

Step 4. Shop for homes and start making offers

Now that you already have your mortgage prequalification and preapproval as well as a good real estate agent, then it is time to start looking into and visiting the houses within your price range. This will go easier if you will keep a checklist of all the homes you have visited and will still visit. You might even want to take photos or videos to help you remember which is which.

The details you need to check out from each house include the plumbing, the water pressure, and the electrical system. You might also want to see if the windows open and close properly and that it is conveniently located near restaurants, shopping centres, parks, schools, and public transportation, among many other considerations you can think of.

Step 5. Arrange for a home inspection.

Before you make an offer to buy a home, it is best if you will have a home inspection done first. This is so the property can be checked for structural damage and other things that need to be fixed. You will also be able to withdraw your offer without having to face penalties or call for a renegotiation should there be problems you could not work out. Your real estate agent can be the one to arrange for this inspection to be done before the seller actually accepts your offer.

A home inspection report will be sent to you and your agent from which you can make your decision on whether you need to have things fixed before you close the sale. Before you close the sale of the home you decided to buy, you will get to have a walk-through which will allow you to check if the repairs you agreed on were actually done.

Step 6. Work with your mortgage banker on the type of loan you want.

Lenders have a broad range of loan programs that you could choose from. Depending on your priorities as a new homeowner, you will have to choose the kind of mortgage that is best suited for you. You can go for the type of mortgage that will keep your monthly payments at a minimum or one that ensures your payments never go up. If you have a plan to move again after several years, then there is also a loan that could cover that.

Step 7. Arrange for the appraisal of the home you wish to buy.

This is between you and your lender. Usually, lenders will make sure that an independent appraiser provides an estimated value of the home you are planning to buy. This appraiser will come from a third-party company and won’t be directly connected with your lender. The appraisal report will allow you and all the parties involved to know if the price of the home you intend to buy is indeed fair.

Step 8. Get all your paperwork together.

As you have already guessed, buying a home involves a mountain of paperwork. Before closing the sale of your home, it is best if all of your documents are gathered together and are all in order. These include making sure that the seller is the rightful owner of the home you are buying and that all of the house’s ownership documents are ready to be transferred to your name. Mostly, your lender and real estate agent can help you in getting all of these papers sorted out.

Step 9. Close the sale and finally get your home.

At this stage, you are one step close to moving into your new home. During the closing phase of buying a house, you will need to sign all the needed paperwork so the purchase can be completed, and these include all your loan documents. After the lender receives all your papers, it will typically take several days for the funding of your loan to go through. As soon as the check is sent to your seller, you will finally be the owner of a new house.

Now that you have these steps on hand, the only thing to do is to follow them. This will ensure that the process of buying a home will be somehow painless for you and the other people involved.

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